The Bank of Canada had a good week. Governor Stephen Poloz’s crew took some risks and was rewarded.
On Wednesday, the central bank surprised some by effectively closing the door on an interest-rate cut, a move the bond markets didn’t see coming. And the following day, Carolyn Wilkins, the senior deputy governor, told an audience in Calgary that Alberta’s struggle to adjust to lower oil prices wasn’t reflective of the broader national economy. “This has led to painful adjustments for many of you here and has weighed on Canada’s bottom line,” she said. “Seen from a macro perspective, nonetheless, Canada’s economic performance has been solid.”
Those conclusions carried some reputational risk.
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